Media Release: Equal Funding

Poor planned policy has seen a growing number of unscrupulous registered training organisations (RTOs) making a nonsense of the State government’s attempt to address youth unemployment over the last four years.

A recent report into marketing practices in the vocational education and training (VET) sector by the Australian Skills Quality Authority revealed that 45% of Registered Training Organisations “were marketing and advertising false material”. The report found that these sites offer qualifications in unrealistically short timeframes, provide false information about their affiliations (some are not even affiliated with an RTO, meaning they are nothing more than “non-specific brokers”) and fail to withdraw superseded or no longer available courses from their website, among other misdeeds.

What the report did not mention was the common practice of unethical RTOs channeling young people into training programs that are lucrative for the provider but, in practice, tend to damage the kids’ prospects of finding employment and use up their government funded training entitlement.

This problem is the result of a badly designed government program which tries to encourage training in skills shortage industries by applying widely disparate funding to different qualifications. The program has created an incentive for RTOs to push their young clients towards qualifications in the most lucrative field, regardless how suited the individual is to the industry and despite the lack of fact that the RTO has no actual employment opportunity for in view for the young person upon completion of the course.

The funding is calculated according to how acute the skills shortage is perceived to be – ranging from $1.50 per hour for a Business Administration trainee, through to $14 per hour for a brick layer’s apprentice: money which the RTO receives, in many cases, whether the young person ends up working in the industry or not.

And let’s make one thing quite clear: the students aren’t seeing a cent of this money. In most cases, they aren’t even aware there is such a scheme. They are simply lured in by grandiose promises and exploited by the RTO to make the most profit. On completion, they discover that there is no job available to them and often that the skills they have acquired aren’t of a quality that is accepted by employers. Maybe the RTO convinces them to undertake the next “level” certificate and that realization is delayed. Either way, the training incentive money, which is a one off from the government for each individual in training, is gone, and with that, their chances of finding another training placement with real prospects are significantly compromised.

VET researcher and analyst, Dr John Mitchell, lays the blame squarely on policy makers, arguing that “the proliferation of unscrupulous RTOs using misleading marketing was predictable and avoidable because “VET reform” was ill-thought out, rushed and botched”. He cites an inquiry by the Independent Commission Against Corruption in NSW, which found that the training providers were “rorting the system, either providing no training whatsoever or just minimal training”.

As a result, while Victoria is training more people than ever before, youth unemployment remains intractable, even rising over the course of the last year.

Victoria, which leads the nation in VET policy reform, is unique in feeling the effect of this policy failure at this time.

Essentially, the government has allowed the market to be driven by the RTOs rather than employers. We need only look to the universities and their glut production of fashionable degrees – the latest a flood of wannabe lawyers and journalists hitting the market – to demonstrate that this approach is less than ideal.

The Napthine government must learn quickly and reform the way VET funding is allocated. Funding must be offered equally wherever there is a job waiting to be filled, as the ultimate goal is surely to place young people in work and support the wider economy. Inevitably many of these waiting jobs will be in skills shortage industries. So let’s reward honest training organisations and support employers who provide sustainable employment.

Gary Workman is Executive Director of the Group Training Association of Victoria.

*The Group Training Association of Victoria is the peak body representing group training organisations that employ over 8500 apprentices and trainees across all industry sectors each year in Victoria. www.gtavic.asn.au[/fusion_text][/one_full]